‘Roaring 20s’ after the pandemic? Big banks warn be careful what you wish for
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Keystone-France | Gamma-Keystone | Getty Images)
Barclays CEO Jes Staley has compared the pent up demand currently in the global economy to the end of the 1918 flu pandemic and the subsequent “Roaring 20s.” Speaking on a panel at the World Economic Forum’s virtual Davos Agenda event, Staley laid out the British lender’s expectations for a strong second half of 2021, providing the Covid-19 pandemic can be wrestled into submission by vaccines and containment measures. The 1918 flu infected around 500 million people in four waves between February 1918 to April 1920, resulting in tens of millions of deaths. What followed was a decade characterized by economic and cultural prosperity in the U.S. and Europe. “What that led to when it finally got arrested was the Roaring 20s, and there was just this explosion of demand coming out of that,” Staley said Tuesday. “When we look at the balance sheet of a JPMorgan or a Barclays, there is just enormous stored up purchasing power. Consumers are decreasing their borrowing and increasing their deposits, and small corporates are doing the same thing.”
Jes Staley, chief executive of Barclays Plc. Nicky Loh | Bloomberg | Getty Images
However, Staley did also note that both the impact of the pandemic and the stabilizing effects of fiscal and monetary policy, along with hopes of an imminent rebound, were distributed unequally across both the economy and society. He added that the greatest risk “is not an economic one but a social one” due to people being “left behind,” nodding to widespread civil unrest in the U.S. over the past year. Be careful what you wish for? There are a host of parallels between current global conditions and those prior to the Roaring 20s: the end of a pandemic, the proliferation of new technologies, a transport revolution, political polarization, emerging international rivalries and a soaring stock market. However, HSBC Senior Economic Advisor Stephen King echoed Staley’s concerns, noting that while the Roaring 20s were great for the “real-life Gatsbys” who made their fortunes, actual economic growth in the U.S. economy was distinctly ordinary. “Many rural citizens were left behind. Meanwhile, an inexperienced Federal Reserve struggled to cope with a combination of low inflation and surging stock prices. When it all came crashing down, depression followed,” King said in a research note Wednesday. Between 1920 and the Wall Street crash of 1929, real GDP (gross domestic product) per capita rose by 17.7% in the U.S., with only a handful of major economies performing worse, and nor was the period out of the ordinary compared to other nine-year stretches in American history. Meanwhile Western Europe and the Soviet Union saw much more substantial rebounds, having also been hit by hyperinflation and civil war, respectively.
Trump’s election lies were among his most popular tweets
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“Trump’s primary use of Twitter has been to spread propaganda and manipulate public opinion,” said Sam Woolley, director for propaganda research at the University of Texas at Austin’s Center for Media Engagement. “He used Twitter to delegitimize information or to delegitimize the positions of his opponents.”
A CNBC analysis of Trump’s tweets during his presidency found that his most popular and frequent posts largely spread disinformation and distrust. Many of his most-liked tweets contained falsehoods, while the topic he posted about most frequently, “fake news,” was a weapon for undermining information.
Blocked from using his preferred tool for public communication, Trump left behind 88 million followers, some 16,000 now-deleted tweets while in office, and a legacy of spreading disinformation and distrust on the platform.
Following the U.S. Capitol riot, Twitter permanently banned President Donald Trump’s account “due to the risk of further incitement of violence.”
While the posting of falsehoods is one form of misinformation, Woolley said, Trump also practiced a less direct mechanism: Attacks intended to delegitimize information. This is most visible in the use of Trump’s favorite phrase, “fake news,” which appeared roughly 900 times across his tweet history.
The House of Representatives is expected to impeach Trump on Wednesday afternoon for a second time. The Democratic-led House introduced an article of impeachment Monday that cited Trump’s repeated false claims of election fraud as evidence that he ignited insurrection at the Capitol.
“Since the November election, Trump has turned to Twitter as the core platform for spreading disinformation about the election,” said Woolley.
Those 36 posts containing election falsehoods received a collective 22.6 million likes and 3.9 million retweets, according to the analysis, which used a historical log of Trump’s posts from the Trump Twitter Archive and excluded any retweets from accounts other than @realDonaldTrump.
“Trump uses social media and terms like ‘fake news’ and ‘witch hunt’ and his power there to create the illusion of popularity for ideas that actually have no basis in reality,” said Woolley. “Often what this does is create a bandwagon effect for supporting false or misleading things, or more generally attacking institutions,” which may include health care, science, education, and the government, in addition to the media.
The most common two-word phrases used in Trump’s tweets as president 1. Fake news 2. United State(s) 3. Witch hunt 4. White House 5. America great 6. Total endorsement 7. New York 8. News media 9. Great job 10. Great again
The increase in social media disinformation from Trump and others has visible effects on U.S. democracy, said Kelly Born, executive director of the Cyber Policy Center at Stanford University. She described broad impacts, such as decreasing trust in institutions, and more specific, tangible outcomes, like the mob of Trump supporters that interrupted a joint session of Congress confirming Joe Biden’s election victory.
“There’s no question that the [social media] platforms were used in every step” of the riot, said Born, “from the heightening of tensions between these groups to really exacerbating the animosity to actually physically organizing, with people talking about bringing zip ties and rope and where to go and when.”
Woolley agreed that last week’s events show the power of Trump’s internet presence outside of social media, explaining how the online and offline worlds are connected.
The Trump Twitter cycle followed a now-familiar pattern throughout his presidency: Trump tweeted to millions of followers, who further spread the messages in his posts, which were then covered in the media and pushed further into the public discourse, giving Trump another opportunity to comment on his initial message.
“There have been other Republicans and supporters discounting what he does, saying let him have his thing on Twitter, downplaying or ignoring it,” Woolley said. “With what we’ve seen in Washington in the last several days, we can no longer deny the fact that what Trump does and says online has serious offline consequences.”
Trump spoke publicly for the first time since the riot on Tuesday, but did not take personal responsibility for the violence. In his comments, he used language similar to that seen in many of his tweets, calling the impeachment talk “really a continuation of the greatest witch hunt in politics.”
In addition to how Trump used the tool, Born said that part of his Twitter legacy is that his actions finally forced social media and tech platforms to take action against the type of content and behavior he promoted. In the last week, Google and Facebook suspended or banned Trump from their platforms, Amazon withdrew cloud computing support from social media app Parler due to violent content on the platform, and Twitter suspended more than 70,000 accounts associated with the far-right QAnon conspiracy theory.
Because of Twitter’s permanent suspension of Trump’s account, most of his tweets that were embedded in media stories over the years have vanished, leaving a hole in the historic record of the 45th president. Private companies do not fall under rules for government agencies to preserve documents and communications for legal and historic research.
“These Tweets will no longer be available to the public and this is not an institutional government account,” a Twitter spokesperson told CNBC by email Wednesday. “We defer to the White House and National Archives and Records Administration on preservation requirements. We will work with the government to help fulfill their archival laws.”
The spokesperson also noted that Politwoops preserves all deleted tweets.
Europe and Biden ‘on the same page’ over Big Tech regulation, EU chief says
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LONDON — President-elect Joe Biden and the European Union are “on the same page” when it comes to regulating tech giants, the head of the European Commission told CNBC on Wednesday.
Ursula von der Leyen, president of the EU’s executive arm, is confident that the new U.S. president will be an “ally” in fighting disinformation online and stepping up the rules on how tech firms operate.
The 27-member bloc has big ambitions for the new U.S. administration and it was not shy to demonstrate that on Inauguration Day.
“If there’s hate out there, if there’s polarization, fake news, all of these are things that are threats to our democracies and I am sure that we will have an ally to work on that,” von der Leyen said.
Tech regulation has been a priority among European officials, but the Capitol riots and the subsequent actions of Twitter, Facebook and others have increased the calls for action. Some lawmakers have questioned whether these companies should be treated as publishers rather than tech firms — meaning they would be more accountable for the content available on their platforms.
“Europe is coming forward with these standards, but I am convinced that the United States will be attentively listening because Joe Biden has always been a politician who was cherishing the rules-based order,” von der Leyen said.
It is important to put rules already in place in the offline world “in the online world,” von der Leyen said. “That is for me important, that is for Joe Biden important and therefore I think we are on the same page,” she added.
Speaking earlier on Wednesday, von der Leyen had expressed her support for “clear guidelines that the internet companies take responsibility for the content they distribute.”